Regulatory Alerts2008-11-04 | ISGC-2008-007-DOBFHLB Seattle Letter of Credit Program Exemption from RCW 30.04.140
The Washington State Department of Financial Institutions determined that state-chartered banks participating in the Federal Home Loan Bank of Seattle's Letter of Credit Program do not violate RCW 30.04.140. This conclusion relies on the representation that the blanket security interest pledged by members secures separate loans rather than constituting a pledge to a depositor. Consequently, the collateralization structure allows these banks to participate in the program without breaching state banking statutes.
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